Within the Scope

Blogging on Administrative Law and the Public Sector

Thursday, April 02, 2009

Gabba Gabba Hey: Is the Decision "In Re Gabby’s" a Big Deal or Not a Big Deal?

On Tuesday of this week, the Minnesota Court of Appeals issued a published decision which has had me thinking.

At issue in the case was the propriety of the City of Minneapolis’ imposition of licensing conditions on the liquor license held by Gabby’s Saloon and Eatery in Northeast Minneapolis. Finding that Gabby’s patrons acted boisterously and unlawfully following their exiting of the premises, the City imposed a series of strict licensing conditions on the operation of the saloon. The conditions were imposed despite a lack of evidence that Gabby’s personnel had violated state or local liquor control laws or that Gabby’s had “encouraged or tolerated illegal conduct.”

Reversing, the appellate panel held that the Minneapolis licensing ordinance neither permitted the imposition of conditions – short of revoking or suspending the license outright – nor did it put licensees on notice that the conduct of patrons outside of the licensed premises could result in adverse regulatory action.

Because Minneapolis had not formally claimed the power to impose conditions on such licenses, by ordinance, and “the power to impose conditions on a liquor license is not a ‘lesser’ subsidiary power within the authority to grant or revoke a liquor license,” the panel concluded that the particular licensing conditions could not stand.

What has had me thinking is whether the defects in the ordinance pointed out by the appellate panel are widespread in Minnesota – involving dozens or hundreds of local liquor ordinances – or rather a shortcoming only in Minneapolis’ regulatory regime? Is this case a really big deal or not so much?

The Saint Paul Legislative Code, for example, appears to place licensees on notice that conditions short of suspension or revocation may be placed on their licenses. It reads in part:

When a reasonable basis is found to impose reasonable conditions and/or restrictions upon a license issued or held under these chapters, any one (1) or more such reasonable conditions and/or restrictions may be imposed upon such license for the purpose of promoting public health, safety and welfare, of advancing the public peace and the elimination of conditions or actions that constitute a nuisance or a detriment to the peaceful enjoyment of urban life, or promoting security and safety in nearby neighborhoods.
A similarly important question is how the localities that have defects in their licensing ordinances can rebuild their regulatory machinery. Even assuming that new, and more specific ordinances can be enacted in short order, can a municipality impose enforceable conditions before the license comes up for renewal? Are all regulatory bets off until then? And if this is true, will the practice of automatically renewing licenses upon the payment of the appropriate fee be suspended, as local licensing agencies stop to impose specific conditions before renewing any liquor or restaurant licenses?

The panel’s complete analysis – which I have taken to reading and re-reading at my local saloon while humming to myself – is accessible here.